Upon buying my first home, I never imagined spending $25,000 on repairs and maintenance within one year… but that is precisely what happened.
While my first year as a homeowner was reasonably uneventful — my most costly expenses were painting my garage door and installing a brand new front door — Year Two was a completely different story.
This past winter — the coldest in years — took a toll on my home. While I was fortunate not to have a tree branch come crashing through my roof, the freezing temperatures compromised the outside of my suburban bungalow. One day, as I stepped out, I noticed that the floor of the basement retaining wall had raised; this was just the start of my troubles. My flagstone front porch steps soon fell into bits, and of course that my eavestroughs were leaking.
When I woke up to 2 inches of water in my basement, I knew I would need to spend major bucks on home renovations. Spring could not arrive soon enough, even though the longer-than-average winter gave me lots of time to phone around to contractors for quotes and put money aside.
Cleaning up flooding is always a dirty job.
The Significance of an Emergency Fund
As one homeowner and breadwinner, I decided to be prudent and tick off six months’ living expenses in my TFSA; little did I know I would want every last penny.
I knew homeownership is pricey, but that did not ring true before I desperately needed repairs on my home. Condo owners have a lot less to worry about; if you have a house, major repairs like a leaky roof and new furnace can creep up on you.
A guideline for homeowners is that you should be prepared to spend an average of 3 per cent to 5 per cent of the value of your house on maintenance and repairs every year. By way of instance, I bought my house for $425,000 in August 2002, so I need to put aside up to $21,250 annually. This might appear large, but owning a home isn’t cheap folks!
Dealing with Contractors
Possibly the most stressful part of the renovations was coping with builders — its actually buyer beware. I have heard lots of house renovation horror stories about shoddy work, incomplete jobs and financial disputes.
I learned firsthand the lowest quote was not always the best when my neighbour had to have his pavement redone. Fourteen days later the cement slabs had raised; once my neighbour called the builders about the lousy workmanship, they disconnected their phone number and disappeared into thin air, leaving him to foot the bill.
Gather Several Estimates
If your renovations are extensive (spending at least $10,000), I suggest getting at least five estimates.
It’s a fantastic idea to take some time to meet with your contractor in person. You need to bring along someone knowledgeable about renovations to help ask the correct questions. If a contractor can not answer simple questions before the work has started, they are probably best not employ. It is essential to get your quote in writing with every detail written to the contract — you will be thankful you’ve got it if there is a dispute!
Agree on a Deposit
It’s important to not give your builder too much cash up front. My builder asked for a 50 per cent deposit in the beginning and 50 per cent when the job was completed. While builders are the renovation specialists, it is a fantastic idea to keep an eye on things to guarantee they’re going according to plan. By way of example, my builders would have dug my pavement in the wrong place if I did not keep a watchful eye.
I learned firsthand the significance of having a contingency fund. When the builders tested out the drain in the base of my retaining wall, they advised me that I would need to spend an additional $4,000 on a sump pump, or they could not finish the job.
Even though the renovations were pricey, they will increase the value of my home over the long-term.